An application is any program on a computer, for example, IE7 is an Internet browsing application. A database is simply somewhere where data is stored, and is usually accessed via a front-end application.

A database is a file which contains useful information. A file with customers information may be called a customer database. An application may be a program or a collection of programs which may run the database or raw data. A penny for this thought!

A database is the data that is stored in records in the tables. A database application is the program that queries the database and returns usable information.
For example: John, 20, 6, Dec07 could be data in a record. The usable information returns: Name: John, Age: 20 years, Length: 6' Started working: Dec 07.

The only thing I would add is that a database is an ongoing amount of info. Like a production schedule through a network, however often it is updated with all of the new info input from all users with access. A spread sheet is something that contains data for a user, an excel database is always changing, for all users, according to the new data added. Excel is the application, the info input is data, and the stored file is a database

When comparing the two expressions 'database' and 'application' you seem to be asking, "What turns a database into an application?". The chief difference is in the interface.
A database developer will start with a database. Databases are notoriously complex and call for a certain amount of database expertise from the user if he is to get any useful information out of it. The developer will then add a variety of queries to manipulate the data, forms to display and enter data, macros to automate certain tasks, and reports to produce printed versions of different aspects of the data. At this point it is still a database and still requires a good deal of expertise from anybody who uses it.
The developer will then hide the fact that it is a database behind an attractive and easy to use graphical interface from which a relatively inexperienced user can select, for example, data entry windows for different aspects of the data. These windows will be so well designed that using them will be virtually automatic, even to a novice. He will also provide a simple means of selecting reports to be printed. When the database has reached the point of development that a relatively inexperienced computer user can use it easily and effectively it will have become an application.

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